- FTSE 100 up 137 points at 8,163
- Legal & General ups divi despite flat profits
- US stocks continue rebound
4.00pm: FTSE 100 rebounds
London's FTSE 100 is on track to close nearly 1.7% higher, with blue chips enjoying a strong day after Japan's central bank helped calm concerns regarding carry trades.
Deputy governor Shinichi Uchida said the Bank of Japan would not increase interest rates until after the financial instability subsided.
The UK's blue-chip index is now close to flat when compared to where it was when it started the week, but remains some way back, 2.5% down, week-on-week.
Helping with the gains was Ladbrokes owner Entain, which rose 5% ahead of its results tomorrow.
Analysts at Jefferies are expecting the group to report net gaming revenue growth of -2%, however with the shares up in anticipation, an outperformance could be on the cards.
Banks liked NatWest, Lloyds and Barclays were also on the rise as they begun to cut mortgage rates following the Bank of England's reduction to interest rates last week.
Vodafone was also on the up, lifting 4%, after it announced €500 million (£429.5 million) share buyback programme.
3.40pm: Currencies and commodities today
While global markets continue to even out and recover some of the losses suffered earlier this week, here's a look at how commodities and currencies have performed:
- Bitcoin: flat at US$56,017
- GDP/USD: +0.25% at $1.21
- GDP/EUR: +0.25% at €1.163
- EURO/USD: flat at $1.092
- Brent Crude: +1.8% at $77.87
- WTI Crude: +1.8% at $74.56
- Gold: +0.8% at $2,402
- Silver: +0.6% at $27
3.22pm: Airbnb tumbles
As the UK's FTSE 100 continues to wipe away most of the losses suffered earlier this week, the US is on a same path, with all three key indexes in the green.
One company sliding the other way, however, is Airbnb after it sunk close to 15% on the back of revenue guidance for the third quarter falling short of expectations.
The app operator said it was seeing "some signs of slowing demand from US guests" and shorter booking lead times globally, implying more lastminute decisions due to increased uncertainty and caution over spending.
For Q3, Airbnb projects revenue in the range of $3.67 billion to $3.73 billion, representing year-over-year growth of 8% to 10%, missing estimates of $3.86 billion.
For the past quarter, earnings per share (EPS) booked in at $0.86, down from $0.98 from a year earlier and missing Wall Street estimates of $0.92.
2.59pm: Thames Water hit with enforcement measures
Thames Water, the embattled utility firm, has been hit with a string of enforcement measures, including being appointed an independent monitor, after it breached its operating licence.
The company, which like most of the UK's privately owned water companies has been loaded up with debt, was hit with large fines earlier in the week after it was found to have routinely released sewage into rivers and seas, not just in exceptional circumstances allowed during strong rains.
Regulator Ofwat said Thames, the country's largest water supplier, had breached the terms of its licence after two credit ratings agencies decided that its debts were no longer investment-grade.
Ofwat said the company would now agree to comply with a series of commitments, which as well as the appointment of an independent monitor, will also include appointing new non-executive directors to its board.
Thames Water must also develop and deliver a suitable plan to turn around its operations, and take the steps required to deliver an equity raise.
The monitor will report back to Ofwat frequently and be entitled to access to company information, the watchdog said.
2.35pm: Wall Street green at open
US stocks have opened higher today, continuing on with the strong momentum as the markets look to recover as much of the losses suffered this week as possible.
The Dow Jones started trading nearly 0.5% higher, while the Nasdaq popped close to 2%, but still remains another 2% down from where it started this week.
The S&P 500 rose about 1.3% as well.
Disney shares slipped 2% despite its revenues and earnings rising more than forecast in the past quarter, helped by Inside Out 2 becoming the highest-grossing animated cinema release of all time.
Revenues from Disney World and Disney Land parks in the US decreased in what was the group’s fiscal third quarter, with overall sales from its Experiences division hit by “moderation of consumer demand towards the end of Q3 that exceeded our previous expectations”.
Disney also announced it would be raising prices across its streaming services over the coming months and one year on from the last hike.
Prices across Disney+, Hulu and ESPN are all set to increase in the US, which will come into play from October 17.
1.49pm: Honda posts record profits
Honda saw its profits reach a quarterly record in the three months to June after it was helped by impressive sales of its hyrbid vehicles in the US and Japan.
Net profit at the Japanese automaker increased by 8.7% to £2.1 billion (394.6 billion yen), while sales rose close to 17% to £28.8 billion.
Despite the record quarterlies, annual earnings targets were kept unchanged, with Honda predicting net profits of £5.3 billion and revenues of £108 billion.
Honda added that its car sales were "robust" throughout the quarter, and recieved a tailwind after it raised prices of its hybrid models in Japan and the US.
Overall, unit sales dropped during the three months due a poor performance in China as comeptition continues to ramp up.
1.29pm: Wall Street to open higher
US markets are set for another day in the green after all three of the main indexes lifted around 1% on Tuesday.
The Nasdaq is on track to begin trading nearly 230 points higher at 18,422, while the S&P 500 is positioned to rise 55 points to 5,323.
The Dow Jones is set to open more than 280 points higher at 39,423.
"The lingering question now is whether the concerns that pushed the market into a cascade of selling are alleviated," said LPL Financial chief global strategist Quincy Krosby.
"Pockets of volatility are expected to continue as August and September give way to a calmer seasonal period, however, it’s important to remember pockets of opportunity are always on the other side of the storm.”
1.11pm: Hewlett Packard deal with Juniper approved by CMA
Hewlett Packard Enterprise has had its planned takeover of Juniper, the networking tool developer, approved by the Competition and Markets Authority.
The CMA launched the initial investigation back in June after the US tech group announced the £11 billion offer in January.
Acquiring California-based Juniper is expected to double Hewlett-Packard's networking business.
The all-cash deal values Juniper at $40 per share, and HPE said it expects the deal to close later this year or early in 2025.
“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands,” HPE CEO Antonio Neri said in a statement back in January.
12.54pm: Sports retailers shake off Puma's warning
Nearly all major markets in Europe are up today, with the main indexes in Germany, Spain, France, and the UK all posting gains of around 1.5%.
However, for German fashion giant Puma it's been a different story, with its shares down close to 10.5% on the back of concerns over consumer spending.
Reaching their lowest point since 2018, shares dropped after the sportswear company warned that macroeconomic and geopolitical factors may squeeze profits more than previously expected.
The German company said these challenges were weighing on consumer sentiment, while shipping costs are also higher, leading it to give guidance for 2024 operating profit of €620-670 million, compared with earlier guidance of €620-700 million, and last year's €621 million.
Sports retailers in the UK have appeared to of shaken off any read-across from Puma, with JD Sports and Frasers, the owner of Sports Direct, both lifting by 2%.
Nike and Adidas held flat, with the former set to begin trading later today in the US.
12.30pm: London asset manager fined for "serious breaches"
H2O, the asset manager, has been told it must repay its investors €250 million after the financial watchdog found it had failed to undertake proper due diligence for some of its riskiest bets.
Britain's Financial Conduct Authority (FCA) said the London-based firm had made "serious breaches" when investing in Tennor Group, a range of companies owned by German financier Lars Windhorst.
Following an investigation by the FCA, it found that there were at least 50 examples of staff members having recieved hospitality that was not correctly declared, including the use of a private jet and a superyacht.
H2O, which at one point had close to €30 billion of assets under management, was also found to have provided the FCA with misleading and incorrect statements and documents, including falsified minutes from meetings.
As punishment, the firm has agreed to pay €250 million to investors whose stakes still remain stuck, while H2O will also cancel its UK authorisation by the end of the year.
Steve Smart at the FCA said: "H2O’s job was to manage its funds properly and protect investors. It failed to do this and, to make matters worse, it repeatedly provided misleading information to the FCA.
"Through this settlement the FCA has secured money for affected investors and agreement that H2O will stop operating regulated business in the UK."
12.04pm: Coca-Cola HBC falters on higher financing costs
As the FTSE 100 one of its best sessions in the last few weeks, up more than 1%, some of its constituents haven't been as lucky, including Coca-Cola HBC.
Shares of the bottling segment of the soft drinks empire dropped 1.5%, making it one of the day's biggest fallers, despite having seen forecasts lifted.
Coca-Cola HBC reported organic revenue growth of 13.6% to €5.17 billion (£4.44 billion) in the first six months of 2024, leading to a full-year revenue forecast between 8% and 12%.
The group had previously guided to a range of 6% and 7%. Earnings before interest and tax (EBIT) forecasts were also upgraded.
Investors may have been rattled by Coca-Cola HBC’s surging finance costs.
Comparable earnings per share of €1.04 were down 1.7% year-on-year due to these higher finance costs.
Full-year financing costs are now expected in the range of €60 million and €75 million compared to the previous forecast range of €50 million and €70 million.
11.44am: US to avoid recession, reckons Goldman boss
The US will avoid a recession, the boss of Goldman Sachs has said, adding to the growing narrative that markets and economies should be able to recover from this week's sell-off.
David Solomon, chief executive at the US bank, claimed he believed the Federal Reserve would avoid implementing an emergency rate cut and may instead wait until Autumn.
Market derivatives on Monday showed a 60% chance that the US's central bank would cut rates within the next week.
It is now odds-on for the first rate cut to come in September, with a 58% chance that it will be by 0.5%.
Solomon said on the The David Rubenstein Show: "I don’t expect that you’ll see anything before September.
"The economy will chug along and we probably won’t see a recession. Based on the economic data we’re seeing now and the messaging from the Fed, I think it’s likely that we’ll see a cut or two in the fall."
11.28am: Vodafone jumps on share buyback
Shares in Vodafone have jumped close to 2.5%, making it one of the top FTSE 100 risers today, after it announced €500 million (£429.5 million) share buyback programme.
Vodafone tapped Wall Street banking giant Goldman Sachs to facilitate the buybacks, which will see around 2.5% of Vodafone’s current market value returned to share holders.
“The sole purpose of the programme is to reduce share capital,” said the company.
Vodafone previously committed to returning €2 billion back to shareholders following the sale of its Spanish business to Zegona Communications for €5 billion.
11.07am: Market downturn not a game changer, says analyst
The FTSE 100 is now up more than 70 points or 0.9% to 8,099, placing it 75 points behind where it was before Monday's drop.
Analyst Holger Schmieding at Berenberg has looked the market's most recent downturn with a slight sense of de ja vu.
"It is almost a pattern. Not for the first time, equity markets have fallen sharply just before the end of my summer holidays," he said.
"Even abstracting from economic fundamentals, dramatic market moves can impair the economic outlook by themselves if they affect financing conditions and depress business and consumer confidence.
"So far, serious damage still seems unlikely."
All in all, the market turbulence highlights the downside risk to the economic outlook and a chance that the Fed may ease by more than expected beforehand.
"But I do not see it as a game changer. At this stage, a genuine US recession and its negative implications for global markets and the world economy are still a tail risk rather than a scenario with a probability of more than 20%."
10.44am: SoftBank launches buyback to ward of actvists
Japanese technology conglomerate SoftBank announced a 500 billion yen ($3.42 billion) share repurchase programme in the first-quarter financial results.
The announcement comes after famed activist investor Elliott Advisors built a minority stake in SoftBank, which owns British microchip giant Arm, in order to influence its shareholder return policy.
Whether the $3.4 billion announcement will keep Elliott happy remains to be seen; the firm has been pushing for a $15 billion buyback package, according to earlier reports.
The last share repurchase programme on SoftBank’s records was conducted nearly two years ago, when the group bought back 400 billion yen worth of shares between October and November 2022.
10.25am: Virgin Atlantic ad banned
Virgin Atlantic has seen an advert highlighting the first fully sustainable fuel-powered transatlantic flight banned in the UK.
Ruling the advert would mislead customers over the airline’s environmental credentials, the UK’s Advertising Standards Authority (ASA) banned the radio feature on Wednesday.
“We considered most consumers were likely to be aware that aviation was a high carbon-emitting sector,” the advertising watchdog said in a statement.
“However, they were unlikely to be aware of the extent to which fuels described as sustainable aviation fuel still had negative environmental impacts.”
10.04am: Analysts react to Legal & General results
Legal & General shares are nearly flat today following its results, but as the fourth most traded stock in the FTSE 100 in terms of volumes, analysts have been placing the insurer under the microscope.
Adam Vettese, at eToro, said: “Legal & General has inched over the line of beating consensus by 1% in a very steady if not uneventful set of results. Arguably this is exactly the kind of news investors want to hear after the week they have had given the recent global sell-off.
“Overall shareholders will be looking ahead to how new CEO Antonio Simoes' overhaul plan develops and if shares can recover some of the ground they have lost so far this year."
At Swiss bank UBS, analysts said most operating metrcis proved better than expected, but noted that "investment variances were a large negative, with -£417m within the core businesses and -£187m in non-core."
"We expect a small negative reaction given the large negative investment variance and low new business margins," added UBS, which is a buyer of L&G.
Russ Mould at AJ Bell said: “There may not have been too much to get investors excited in the financial results themselves... However Legal & General continues to deliver on a key metric which matters for shareholders – dividends."
9.45am: WPP falls as sales growth slumps
As the FTSE 100 hovers around the 8,080 mark, nearly 50 points higher than yesterday's close, advertising giant WPP is one of the index's top fallers today after its interim results.
Shares in the group dropped close to 2% after it trimmed its global workforce by 3,000 roles in the past year to reduce operating costs at a time when industry sales are failing to show momentum.
According to interim results posted on Wednesday, WPP’s headcount was 111,000 as of 30 June, down from 114,000 at the same point in 2023.
“Staff costs… were down 3.3% compared to the prior period, reflecting higher wage inflation offset by lower headcount as a result of the actions we have taken to mitigate the top-line decline,” said the group.
Year on year, WPP’s revenues grew just 0.1% to £7.23 billion in the period, reflecting stagnant advertising budgets from its blue-chip client base.
9.24am: Glencore lifts on plans to keep coal business
FTSE 100 miner Glencore has lifted close to 1% this morning after it said it was keeping hold of its coal business, offsetting the potential negativity from suffering a first-half loss.
The miner and commodities trading giant said lower energy prices, particularly for thermal coal, led to underlying earnings (EBITDA) sinking 33% to $6.3 billion, though revenue was up 9% to $117.1 billion.
A net loss of $233 million was reported after the FTSE 100 group recognised $1.7 billion of ‘significant items’, including almost $1.0 billion of impairment charges, a big swing from first half net income of $4.6 billion a year ago.
Chief executive Gary Nagle said: "Following completion of the acquisition of EVR in early July, we undertook an extensive consultation... and based on the outcome of that process... endorsed the retention, rather than demerger, of the coal and carbon steel materials business.”
8.59am: Novo Nordisk (NYSE:NVO) tumbles on profit warning
Shares in Europe's largest company Novo Nordisk (NYSE:NVO) have slid close to 4.5% after it slightly lowered the profit outlook for this year.
Operating profit for the maker of weight loss and diabetes drugs Wegovy and Ozempic increased 18% in the second quarter of 2024 to 57.8 billion Danish krone (DKK), slower than the 27% growth seen in the first quarter.
Operating profit was impacted by a DKK 5.7 billion impairment loss related to ocedurenone, after phase 3 trial was stopped in June for the potential hypertension treatment.
The 2024 sales outlook was hiked to 22-28%, up from 19-27%, but the outlook for operating profit growth was trimmed to 20-28%, compared to the 22-30% initaly forecast.
8.31am: Bank of Japan helps calm markets
One reason why markets across the world have edged into the green overnight and this morning is because of the Bank of Japan's intervention yesterday, when it said it would not increase interest rates until after the financial instability subsided.
Deputy governor Shinichi Uchida spoke in a bid to cool the jitters occurring in the markets after Japan's Nikkei suffered its worst session in its history on Monday.
Fears the global-sell off would continue were driven by the unwinding of carry trades, the use of cheap currency to buy assets, as investors look to exit positions in stocks as the value of the yen continues to increase and squeeze margins.
Traders had been using the Japenese yen, which was cheap against the dollar and inexpensive to borrow due to low interest rates in Japan, to purchase stocks in other countries.
However, when the Bank of Japan decided to cut rates unexpectedly, the value of the yen surged, causing these carry trades to come under intense pressure.
Uchida said: "As for the future conduct of monetary policy, in a nutshell, I believe that the Bank needs to maintain monetary easing with the current policy interest rate for the time being, with developments in financial and capital markets at home and abroad being extremely volatile.
8.14am: FTSE 100 lifts at open; L&G flat
The FTSE 100 has opened nearly 50 points higher, or around 0.7% ahead, this morning, meaning the index is now just 1% down from where it was prior to Monday's sell-off.
Constituent and insurance giant Legal & General started the session flat after it increased its interim dividend by 5% despite generating flat profits in the first half.
Earlier this summer the life insurer’s new chief executive, António Simões, set out his strategy to target 5-9% core profit growth and cumulative growth of £5-6 billion of Solvency II capital by 2027.
For the first half of 2024, the FTSE 100 group made a core operating profit of £849 million, up 0.5% on a year ago, but safely ahead of the City analyst consensus forecast of £834 million.
Alongside the half-year numbers, Simões said he and the board continue to expect 2024 core operating profit to grow by mid-single digits year-on-year.
7.58am: Musk sues Unilever, Mars and more
Elon Musk's X/Twitter is suing a group of companies including Unilever, Mars, CVS Health, Orsted, and the World Federation of Advertisers (WFA) for boycotting its advertising.
The lawsuit claims the boycott deprived X of billions of dollars in revenue at a time when the social media site's sales were under pressure, with the company having just been bought by Musk.
Advertising revenue at X fell by more than half after Musk's acquisition as companies appeared to avoid using the site for promotions amid fears not enough was being done to remove harmful content.
Musk alleges that the companies conspired to withhold advertising after following safety standards set out by the WFA's Global Alliance for Responsible Media, Garm.
Garm's alleged aim is to "help the industry address the challenge of illegal or harmful content on digital media platforms and its monetisation via advertising".
X boss Linda Yaccarino said: "People are hurt when the marketplace of ideas is constricted. No small group of people should monopolise what gets monetised".
Musk added in a tweet: "We tried being nice for 2 years and got nothing but empty words. Now, it is war."
7.38am: House prices kick higher in July
UK house prices ticked higher in July after three previous months of staying flat, helped by strong rises in the North West and Northern Ireland, the latest Halifax house price index revealed.
Overall, prices increased by 0.8% last month compared to June, with values of homes expected to increase further after the Bank of England decided to cut interest rates at the start of the month, making it easier for Brits to get a mortgage.
Annually, home prices have jumped by 2.3%, representing the largest increase year-on-year since January and causing the average house price to reach £291,268.
Northern Ireland experienced the sharpest rise out of any region, with prices 5.8% ahead of where they were a year ago, while the North West saw home values jump 4.1% compared to 2023.
Amanda Bryden, head of mortgages at Halifax, said: "Last week’s Bank of England’s Base Rate cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home or move along the housing ladder.
"However, affordability constraints and the lack of available properties continue to pose challenges for prospective homeowners.
“Against the backdrop of lower mortgage rates and potential further Base Rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.”
7.17am: FTSE 100 to open higher
The FTSE 100 is on track to open nearly 100 points higher at around 8,114 as London's blue-chip index looks to stage another session of recovery following Monday's heavy sell-off.
UK stocks closed higher on Tuesday, having spent much of the day in the red, only helped towards the end of the session by some positive macro data in the US, which led to the three Stateside indexes closing up around 1%.
Overnight in Asia, stocks appeared to rally for a second consecutive day, with the Nikkei, which suffered its second worst day ever on Monday before jumping double-digits on Tuesday, up close to 1.5%.
India's Nifty 50 and Hong Kong's Hang Seng rose around 1%, while South Korea's Kospi jumped by 2%.
Back in the UK, today, investors will be looking at results from Glencore, L&G and WPP among others.
Legal & General Group’s upcoming interims will hopefully provide some insights into the group’s rumoured sale of its housebuilding subsidiary Cala Group.